“It makes sense to anchor Ather scooters in the premium electric scooter category and not be losing money by firing at an unnecessary price battle," Tarun Mehta, co-founder and chief executive officer, Ather Energy told Mint.
The Bengaluru-based electric scooter startup last month launched the 450X in two variants -- ₹1.49 lakh and ₹1.59 lakh, ex-showroom, Delhi.
Bajaj Auto launched Chetak in January at a starting price of ₹1 lakh (ex-showroom, Pune), and TVS Motor launched iQube for ₹1.15 lakh (on-road, Bengaluru).
Ather Energy's focus will be on superior technology and innovation to differentiate its products from others, Mehta said and acknowledged that as a startup the company will find it tough to battle the established players on manufacturing, supply chain, operational scale and network.
Mehta said Ather 450X offers superior performance such as faster acceleration, top speed, longer running range per charge, fast charging with availability of Ather Grid (its own public infrastructure) and over-the-air software updates over electric scooters seen from the incumbents so far.
“We don’t have that product," he said, referring to a mass market electric scooter.
“We don’t intend to make that product which can directly compete with the models from established players in the immediate future. A few things will have to change for that product to make sense for us financially," Mehta said, adding that such a product is still a couple of years away.
In 2018, Ather had launched two electric scooters -- 450 and 340. The company discontinued the latter last year as it did not sell on lower specifications.
However, Mehta said that entry of legacy players in the electric scooter segment would help grow the market with consumer awareness, interest from suppliers to localise more products and widen electric two-wheeler financing options.
Experimenting with consumer behaviour, Ather has also floated new ownership models in the form of subscription packs and is also working on leasing plans for the future.
To bring down the sticker price of 450X, the startup is offering an upfront cost of ₹99,000 to acquire the electric vehicle (EV), while converting the remaining amount, regarded largely as battery costs, into subscription packs. Mehta said the subscription packs would cover battery related services, including maintenance and replacement, software updates and fast charging facilities.
“While this is largely an urban phenomenon, more customers are gradually getting there. People are increasingly willing to pay if costs are usage based," Mehta said, adding more money can be made via subscription model in the long term than just selling the EVs.
Going forward, Ather plans to offer more subscription packs in different combinations (ranging from cheaper battery and shorter range to advanced battery and longer range) along with leasing offers.
“Under these packs, customers do not have to worry about the end of life of the battery at all. That’s where the industry will go," Mehta said, emphasising that EVs would drive the innovative ownership models.
In contrast, Bajaj Auto, which plans availability of Chetak in Pune and Bengaluru, and TVS Motor that plans to launch its product in Bengaluru are yet to announce subscription-based ownership plans.
Scaling up its operations this year, Ather is expanding to eight additional cities beyond Bengaluru and Chennai and is also setting up a new production unit in Hosur, which will provide an initial capacity to roll out up to 100,000 units per annum.
The startup plans to sell 30,000 units in fiscal 2021 and triple its sales to 100,000 units in financial year 2022 to become operationally sustainable.
Mehta said Ather has received more pre-orders for 450X in the past two weeks than cumulative sales of the 450 model in 2019. It plans to commence deliveries of the new product starting July.
“Once we roll out the 450X and stabilize it in the market, we plan to raise additional funds later this year," Mehta told Mint adding that his team intends to raise more than the last round as Series D to fund the startup’s operational expansion. The IIT Madras alumni did not disclose the amount his team would look to raise.
The company raised $51 million from a series C funding round in May last year.